For as long as most people can remember, a glance out of the corner of one's eye to the upper half of North America would bring warm reassurance that things were moving quietly and gracefully somewhere in the world. Alphonse and Gaston could invariably be heard out there bowing and scraping, and toasting their long undefended border. Today, official devotees of this stately two-step are still meeting and greeting, but few take the old shuffle at face value. Instead, private conversations in directors' board rooms, in expensive lunch clubs, in government cafeterias and in faculty lounges have a distinctly worried and wary undertone.

These are not merely the nervous Nellies (American-style), or the bleeding hearts (Canadian-style). Bad consciences do exist about this overdeveloped and one-sided intimacy that has grown up between the two countries, but that, as everyone knows, is not the stuff of politics. It is not conscience and sentiment which are beginning to interfere with the work-a-day world of gas and oil and the purchase and sale of branch plants, but a new and distinct phase of Canadian nationalism.

Despite recent appearances, this nationalism is still frail and, considering the circumstances, a belated arrival on the political scene. The editor of an eminent American publication put the crucial question in a recent visit. "Why," he wanted to know, "is there so little nationalism in Canada?" It was clear that he knew the background very well. On the economic side, 58 percent of the manufacturing sector is in foreign hands as are 61 of the largest 102 corporations in the manufacturing, resources and utility fields. Seventy-five percent of the capital employed in our oil and natural gas industry is foreign controlled and 52 percent of the trade union movement takes orders of one sort or another from American head offices.

On the cultural side the situation is no better. About half of the university professors in the humanities and social sciences are non-Canadian. Foreign magazines account for 85 percent of the total magazine circulation; Canada still does not have its own national news weekly; foreign books (those not authored by Canadians) form 83 percent of book sales, and 71 percent of the publishing industry is foreign-controlled; 96 percent of the films in Canadian cinemas are foreign, as are much of television, plays, art-and on and on it goes. In Canada, we may still own the cupboard, but little of the contents.

"Foreign," of course, means mainly American (about four-fifths) in every case. What one Canadian economist, Bruce Wilkinson, stated about Canada's intense trade concentration with the United States, can be applied to the economic and cultural situation as a whole: "Canada's position resembles more closely that of a less-developed nation than that of other developed countries."

But statistics alone do not tell the story about the quality of everyday life. It would be a mistake to evoke the image of Canada as a seething colony struggling to break loose. Canada bears rather the signs of a successful lobotomy to which it has voluntarily assented. The routine of daily existence is comfortable, decent and sane. There is only the occasional disorientation of not really knowing what country you are living in. Saunter into a drugstore and there is hardly a Canadian paperback to be found anywhere, although an enormous number have been published. The 10,000 mass paperback outlets in Canada provide the American books read by the great majority of the population, while Canadian books have their home in the 400 proper bookstores. Stroll down the main street of your average city, the marquees alight with the titles and stars of the latest films, and hardly a Canadian film is available anywhere, although several hundred have been made in recent years. Turn on your TV set and the chances are two out of three that it will be an American network show on your television screen. Silent qualms surface now and then, but soon one is lulled into passive acceptance, with a fading sense of loss. Increasingly Americanized tastes in Canada acquire a priority of their own, while the very capacity to create and relay our own sense of self rapidly atrophies.

Occasionally there are surrealistic moments that break the numbness-untypical events that throw the "normal" situation into high relief. In the tangled skein of oil and gas negotiations between Canada and the United States, one of the landmark events occurred on September 29, 1970, when then Energy Minister Joe Greene announced that the Federal Cabinet had approved the largest gas export license in Canadian history-6.3 trillion cubic feet, to be exported over a 15-to-20-year period. The National Energy Board had urged the Cabinet to approve the massive gas export to the United States on the basis of a set of reserve figures supplied by the Canadian Petroleum Association. (Despite its name, the Association consists largely of the major American oil companies which do over 90 percent of the production and refining.) On June 2, 1971, these reserve figures were made public by the Energy Minister when he stated: "At 1970 rates of production, these reserves represent 923 years supply for oil and 392 years for gas."

The rest is history. In April 1975, the same National Energy Board reported that Canada would have a natural gas shortage within this decade and oil production would decline to the point where Canada would become a net importer of oil. Canada is already in that position. Yet the American oil companies remain undaunted and are now pressing (with Canadian government support) for the Mackenzie Valley Pipeline to carry both the Delta and Alaska gas, because of the urgent and imminent gas shortage.

Data on energy reserves expand and contract like an accordion but even Canadian numbness and gullibility have their limits. The rising tide of popular skepticism begins to question all the oil companies' arguments, certainly questions the basis of all our oil and gas export agreements, and even begins to wonder wistfully why oil and gas production should not be in Canadian hands.

One further touch of the surreal in Canada will suffice to throw some light on the quality of everyday existence. In recent years we have had a national university commission investigating the role (actually the absence) of Canadian courses in our universities. Its recent report, To Know Ourselves, recounts the testimony from some American sociologists who now predominate on the staff of Canadian universities. The report states that these sociologists "were even forthright enough to tell the commission that they would not hire Canadians for 'their' departments because 'once one hires a few then they will be pushing for more and more.'"

However bizarre these episodes, the American sociologists as well as the American oil companies are, in their own way, "right." Once the game warden has declared open season, everyone is quite entitled to look to his own catch.

As a nationalist and a dispirited critic of Canadian government policy, I had no immediate answer to the question: why indeed is there so little nationalism, so little concern with serious countermeasures that are crucial to hold the American tide in check and to sustain whatever is still possible of an autonomous national existence?

For the more articulate segments of the community, the press, the political commentators, the academics and so on, it required a sophisticated myopia to fail to notice the self-immolation of Canadian independence in the postwar period. Indeed, the great American takeover has been aided and encouraged by internal forces, what one author called in a summary theme, Canada's "silent surrender." These forces are as prevalent in government as in business. They exist in the trade unions as much as in the groves of academe. The transition to institutionalized dependence occurred with the greatest impetus in the last two decades at precisely the time when, in the rest of the world, the trend was in the opposite direction.

In a belated fashion, Canada is beginning to come awake, and beginning to explore and even to implement new policies. But the penetration of American society in Canada is now so great that there is no practical way to distinguish domestic and foreign policy. New domestic policies inevitably touch the huge American sector closely. Official Canadian foreign policy declarations, such as the "third option" (the move to somewhat lesser dependence on the United States), are little more than changing domestic policy seen in the rearview mirror. They are an effective guide to the past.

Thus, the future of the Canadian-American relationship must be sought on the domestic scene but not necessarily within the federal government. Its recent initiatives have, on the whole, been weak. The Foreign Investment Review Agency aims to achieve better terms for Canada on U.S. takeovers of Canadian business and on new ventures. But even the U.S. financial journal Barron's admitted: "It is difficult to imagine a legitimate business venture which would be impeded by the Foreign Investment Review Act . . . the only U.S. business which wouldn't be cordially welcomed to Canada is Murder, Inc."

As far as energy is concerned, the closing of the door on oil exports to the United States in 1982 will occur after the horse has gone. By 1985, net imports of oil to Canada will amount to 50 percent of Canadian requirements.

On the cultural front, the Canadian edition of Time has, after a 15-year debate, been declared non grata because of the ease with which dumped U.S. copy would siphon off Canadian advertising dollars. Some additional cultural initiatives are pending.

Reassurances to Washington from the Department of External Affairs continue, but the rhetoric of officialdom in a federal state is belied by unexpected eruptions at the periphery, somewhere in the disparate collection of regional loyalties and semi-autonomous institutional structures which constitute the kingdoms (in the plural) of Canada.

With little warning, gas export prices in British Columbia are hiked several times over; the province of Saskatchewan proposes to reclaim half of its potash industry now largely in American hands. Seemingly unfriendly gestures are being made by the autonomous Canadian Radio-Television and Telecommunications Commission to strip the cable TV commercials coming into Canada from U.S. border stations in order to provide a financial base for Canadian programming. The membership of "Canadian unions" is becoming much more restless under American control, and rapid moves toward autonomy are taking place among the teamsters, construction workers, railway workers and chemical workers.

Some other faint thunder is heard here and there in different parts of Canada, but does that really mean lightning is about to follow? Is the age of Canadian immobilism and benign somnolence coming to an end? Canadian nationalists might indeed wish this were so, but their aspirations are as premature as the darker American suspicions.

Everyone was looking for a toehold on the problem, including my visiting American, but none was immediately apparent. I told him that perhaps the answer to his question lay somewhere in the deeper recesses of the elusive Canadian psyche. Some sort of shifting internal deadlock in Canada suggested itself, but how could it ever be uncovered? It may take an unconventional imagination to probe the dynamics of Canadian-American relations at present. As with the ice floes of the Canadian north, the greater preponderance lies beneath the surface. My aim here is not to explore the merits of the immediate issues, nor to air the grievances on either side, but to probe the difficult substratum where the problems have their source. What is developing now is rooted in those antecedent dramas of history and those formative casts of mind that push periodically to center stage. To quote one of our better known Canadian poets and balladeers, Leonard Cohen, "let us compare mythologies."


In the year of the American Bicentennial, retrospective reflections are the order of the day. Among the most compelling is the work of the American historian Louis Hartz who, in The Founding of New Societies, explained how countries of the New World grew and developed within the matrix of that set of beliefs that existed at the moment of their birth. The "fragment" of the Old World that was planted in new soil was a seed carrying John Locke's philosophy of liberalism and freedom. "Born free," Americans must be allowed to become equal. The inner drive has a compelling hold, and, Hartz suggests, "cannot tolerate an accommodation of degree."

Much that was later to emerge as the ideology of American bourgeois society had its roots in that forma mentis or the pristine cast of mind of this liberalism. As U.S. history evolved, through Jacksonian democracy, the New Deal, and the Great Society, Hartz maintains that this ethos became "a moral absolute, a national essence, a veritable way of racial life." This ideological leaven pervaded the search for the solution to ills such as the problem of blacks and poverty.

The very dogma that produced the ferocity of the American Civil War was reiterated in the moral brinkmanship of the cold war. The American liberal ethos, in Hartz' interpretation, proclaims that "the world is really one," and this ideology provides Americans "with a shield against the Saracen [and] the only imaginable moral way of dealing with the man outside the West."

A distinct economic ideology formed an integral part of American liberalism. Free exchange, freely arrived at, always and inherently evenhanded, became the filter through which economic life was viewed. If economic practice did not live up to this prescription, the function of national policy was to restructure the environment to appear to conform to the ideology, from fair trade practices to regulatory agencies and antitrust legislation.

In the 1960s-the coming of age of the multinational corporation-American economic liberalism acquired cosmic wings once more as the economic and moral elements fused. For Roy Ash, the former head of Litton Industries, the world corporation represented a "transcendental unity," for "nothing can stop an idea whose time has come." This global vision pervades the American view of much of what has transpired in Canada. Canadian concerns with the integrity of the nation-state, or the preservation of political and cultural autonomy, receive short shrift against this symphonic resonance of global progress ringing in American ears. Fair dealing, the justice inherent in the marketplace, the sanctity of contracts that have been freely entered into by both parties-these serve as a moral shield against the seemingly outmoded objections that Canadians raise. Such an attitude deeply imbues the outlook of American officialdom as well as American business. The U.S. State Department, while sharing the traditional but limited American skepticism about its own corporations, takes a stand on opposing any Canadian legislation that appears to be either retroactive or discriminatory against American interests.

Thus Americans hold firmly to the implicit premise that all that has transpired to date in Canadian-American relations has, by and large, been evenhanded and mutually beneficial. There have, admittedly, been marginal problems in this vast web of interconnections, but a strong tradition of open lines of communication and administrative flexibility has been, and will be able, to resolve the difficulties.

The cumulative political effect with which we now have to contend in Canada appears as the result of unintended and unforeseen consequences; blind spots were at least as operative on the Canadian as on the American side. But the liberal ethos now provides the moral basis for downgrading and tuning out the difficult, unwieldy, and ultimately dangerous problem of the vast American presence. Those who uphold the code of square dealing and who expect their partners to do the same find that the frail Canadian nationalist rhetoric seems to saddle them with a bad conscience. But they tend to reassure themselves that they have played by the rules of the game and the rules carry no particular compensatory provisions for losers ("handicaps," in rare cases, must be specified at the outset). How, in any case, can there be "losers" in a game whose rules are always "even-steven"? When some understanding is forthcoming, it tends at the same time to echo Lyndon Johnson's first public reference to the Canadian-American relationship: "Canada is such a close neighbor and such a good neighbor that we always have plenty of problems there. They are kind of like problems in the hometown."

The latest expressions of American policy bear clearer marks of recognition of the Canadian situation, but are still not easily budged from the traditional stance. Richard Vine, a Deputy Assistant Secretary in the U.S. State Department, went over the ground recently before the House of Representatives Subcommittee on International Political and Military Affairs. While sympathizing with the "Canadian effort to promote expanded economic and cultural autonomy," he recognized the problems involved:

National controls can rarely be expanded without some impact, usually adverse, on established interests in the area of control. . . . The U.S. government has a responsibility to protect the American interests affected to the extent possible and appropriate.

Friendly personal relations, extensive consultation and administrative flexibility are desirable in themselves, but serve to disguise, even from Americans, the hidden rigidity of American policy. The friendly tone still continues with talk of "interdependence" and "mutual benefits" but it is entirely geared to the dubious objective of the preservation of the status quo. For Americans to insist on nondiscrimination in Canadian policies is tantamount to suggesting that we continue to play blindman's buff with the overwhelming American presence. For Americans to continue to insist on nonretroactive policies only is to abort from the outset any possibility of fundamental change. Together, the two pillars of U.S. State Department policy seem to some Canadians merely a license for cosmetic changes, a variant of Henry Ford's aphorism about black cars.

But on the other side, the unpreparedness is just as great. Many Canadians greeted Nixon's declaration of the end of "the special relationship" with an inaudible but vast sigh of relief. But they were nevertheless still hard put to answer concretely and in some detail the increasingly truculent question, "What do Canadians want?"


I'm struck by the clarity of the American sense of history: in the beginning, the Americans created America. And ever since, they've been consulting their beginning, the way fundamentalists consult the book of Genesis . . . . Canadians don't have such a clear sense of when things began and ended.-Northrop Frye

What appears to many as the paralyzing deadlock of Canadian policy toward the United States, the substantial acquiescence by Canadians in their own takeover, stems from the effects of two different systems of belief that remain out of phase: Canadian liberalism, the credo of the dominant elite culture in Canada, and Canadian populism that grows out of a "homestead mentality." While elements of both systems may be present in the same individuals and in the same political parties and while we must ride roughshod over the fine points and exceptions, these two casts of mind are, so to speak, the two psychic horns of the English-speaking Canadian dilemma.

Canadian liberalism is a close cousin of the American variety. Their origins are common but the cadences and mode of development in Canada differ. The ingesting of nineteenth-century British liberalism was the inevitable consequence of the pride Canadians initially took in their colonial status. Philosophy, economics, politics and law had Oxbridge and Westminster as their respective models. Rhodes scholars and other cadres of the able and affluent went to England for many generations to pay homage to civilization at its apogee. They returned to slip into the waiting positions in business, finance, the universities and the civil service. The global perspectives of nineteenth-century England became the official Canadian credo. Free trade (at least in theory if not in practice) and free markets, civil liberties and parliamentary government, would bring the latter-day millennium of the Enlightenment-English style. Oxford accents sometimes sat uneasily atop Canadian French and barely masked a native Ottawa Valley shrewdness, but the prerogatives of shouldering manfully the delegated responsibilities of the Empire were the order of the day.

The loosening of ties with Britain in the interwar period had no more dramatic consequences for national self-consciousness than that of a dutiful and dependent adolescent reluctantly leaving home at last. The country's self-image never rose in stature above Mackenzie King's truculent ambivalence toward Britain and his seemingly cunning flirtation with the United States. Mackenzie King stated to the American Minister in Ottawa in 1935 that Canada was prepared to loosen its British ties and take "the American road," if a good trade agreement with the United States could be arranged.

The trade agreements were eventually forthcoming for reasons of their own, and the Second World War, in turn, brought a more substantial entente and integration between the two countries under King's direction. King became a good deal more suspicious of "the American road" toward the end of his life, but he had set a pattern followed in broad outline by successive Canadian prime ministers.

Lester Pearson's views heralded a transformation in Canadian opinion to "internationalism," leapfrogging the rather suspect and parochial elements of nationalism. This shining aura overlay the close ties being knotted together under the pressures of the cold war, the joint continental defense agreements, and the open-door policy to all things American. Few paused to wonder at the rather limited range of the "internationalism" we were, in fact, practicing.

Among the most important new influences was the rise of mass education in the postwar period and the redirection of large numbers of Canadian university students from graduate study in Great Britain to the United States. The intellectual atmosphere and assumptions of the University of Chicago, MIT, Harvard and Columbia became the norms of expanding Canadian university staffs and of middle-rank and key civil servants.

In the area of economics, the drums began to beat once more for free trade, and by close analogy for free capital movement. When the institutional form of this capital increasingly became the highly visible hand of the multinational corporation, Canadian economists regilded this new phenomenon with the old paint of Adam Smith. Nothing really new was happening, they maintained, and a carte blanche welcome was to be the policy of the postwar decades. Whatever second thoughts arose in Ottawa were soon suppressed under the old mercantile wisdom of not looking gift horses in the mouth and genuine fears of unemployment. Political time-horizons were short and long-term consequences would look after themselves.

Among the more euphoric prophets of the liberal ethos, elegiac notions arose of Canada as an "international nation," bypassing all that embarrassing, chauvinistic talk of nationhood, which, as everyone knew, simply led to wars. (Whom would Canada attack?) This sentimental miasma produced a comprehensive integrated vision that legitimized the American tide-a vision liberal to its core. In brief summary its components were as follows: an international community seemingly without its constituent component-nations; national intellectual "excellence" without the "parochialism" of national traditions, a community of scholars without any special concern for those indigenous boundaries which shape the direction of national inquiry (the inquiry that produces knowledge rather than simply living off everyone else's insights) ; an economy without specificity-manufactured goods as well as resources are all "commodities," faceless units of exchange in both the domestic and international economy. As the gold rush developed for Canadian resources, the door was opened wider still by the conventional economic wisdom. It maintained that there can, by definition, be no overdevelopment in any sector, if "comparative advantage" is pursued under the aegis of the "market."

The Economic Council of Canada, the government's official advisory body, was under the full sway of this economic wisdom. It never deemed the problem of foreign investment in Canada worthy of a full and proper study, even though hundreds of other topics were closely scrutinized. The debate on foreign investment was launched instead by a tiny subculture of economists and politicians who refused to take liberal rhetoric and neoclassical economic theory at face value. The chief documents to emerge were the Gordon Commission Report (1958), the Watkins Report (1968), the Wahn Report (1970) and the Gray Report (1972).1 They all tried to deal with the issues of Canadian independence in various ways that straddled economics and politics. A picture began to emerge of the "truncation" of Canadian industry-branch plants devoid of research and development facilities, dependent on marketing and purchasing decisions centralized in U.S. head offices-and an overdeveloped resource sector that provided relatively less employment than equivalent manufacturing activity.

The picture was of course mixed, for foreign capital did provide increased employment, paid taxes, and brought new technological and management techniques into the country. But foreign investment was clearly not foreign aid. The specific balance-of-payments effects of foreign investment were difficult to isolate, but one study may give a very rough indication of the magnitudes involved in the two-way flow. The short-term and long-term inflow of capital to Canada between 1950 and 1974 was around $20 billion. This was matched by an outflow of slightly over $40 billion in the same period ($7 billion in interest payments, $17 billion in dividends and $16 billion in "service charges," such as license and management fees).

The Science Council of Canada began to fill in the picture where the Economic Council feared to tread. Its 1972 study, Innovation and the Structure of Canadian Industry, by Pierre L. Bourgault, noted:

We are the world's largest producer of nickel, but we are net importers of stainless steel and manufactured nickel products, including "cold climate" nickel-cadmium batteries; we are the world's second largest producer of aluminum, but we import it in its more sophisticated forms. . . . We are the world's largest exporter of pulp and paper, but we import much of our fine paper and virtually all of the highly sophisticated paper, such as backing for photographic film and dielectric papers for use in electronic components; we are one of the world's principal sources of platinum, but it is all exported for refining and processing and reimported in finished forms; we are large exporters of natural gas and petroleum, but we are net importers of petrochemicals; and, although we are the world's foremost exporter of raw asbestos fibres, we are net importers of manufactured asbestos products.

For a country with a higher than average unemployment problem, the low employment content of these resource exports should have meant something. The issue has now been recognized, but the inhibition on effective policy continues despite much talk in recent years about an "industrial strategy" to increase the manufacturing content of our exports.

Nothing was more emblematic of the whole mood of resignation to the incoming tide than the inability of the External Affairs Department to deal with the issue of the extension of American law to American subsidiaries located in Canada. Under the Foreign Assets Control Regulations (the Trading with the Enemy Act), the Sherman Act and Section 7 of the Clayton Act, the American government retains the primary jurisdiction in deciding which countries its foreign subsidiaries can or cannot trade with, when they might or might not discuss mergers, and so on. The divergence from Canadian policy in these matters was often marked, particularly in regard to the American embargo on trade with China, and up until very recently in regard to trade with Cuba.

The crux of the issue, however, lies neither in the value of potential exports to communist countries which have been foregone, nor in whether American antitrust law has had "good" or "bad" effects on the Canadian industrial structure. There may be legitimate debate about both these points, but the central question is the intrusion of American jurisdiction into a great segment of the Canadian economy through the insistence on the control of U.S. subsidiaries. An elaborate administrative apparatus encompassing several U.S. government departments is set up to try to ensure effective compliance with U.S. foreign economic policy and to impose severe penalties in case of violation. There are no "problems," of course, as long as the foreign economic policies of the two countries are congruent.

The records of the Joint Ministerial Committees of the two countries reveal much symbolic table-pounding, but the Canadians never produced a single workable proposal to implement Canadian sovereignty. The Americans, in turn, never budged an inch in principle, although they were prepared to grant case-by-case exemptions under Washington's total discretion.

Arnold Heeney was the top Canadian diplomat of the period and a living embodiment of the liberal vision. Along with the senior American diplomat Livingston Merchant, he produced the 1965 report entitled Principles of Partnership, which put forward the proposal that problems between the two countries be settled discreetly in the diplomatic corridors before they erupted as "public positions." But the report did contain the single blanket proposal that American extraterritorial law operating in Canada be unilaterally revoked by the United States. Paragraph 61 stated: "We strongly recommend that the two governments examine promptly the means, through issuance by the United States of a general license or adoption of other appropriate measures, by which this irritant may be removed. . . ."

I was involved in a governmental task force at the time, studying the broad range of issues relating to foreign investment in Canada and was intrigued by the origins and fate of this proposal. In a July 1967 interview with Mr. Heeney, he expressed some belated uneasiness about the onrushing economic integration of Canada and the United States. But he confessed, somewhat shamefacedly, that the one original proposal of the report had come, to his own surprise, from Livingston Merchant, his American counterpart. He had not himself seen at any time how the problem could be solved.

I discovered later that the proposal had been blocked by the U.S. Treasury Department and never got anywhere. But the interview summed up for me the limits of Ottawa's liberal vision: the lurking regret and unwitting day-to-day participation in knotting together and smoothing out the strands of Canadian dependence; the excellence in soft-shoe tactics and the haplessness in strategy. After 1968, when legal proposals began to emerge for the first time from both the Watkins and Wahn Reports that showed how American extraterritorial jurisdiction could be effectively blocked by firm action in Canada, the Canadian government ran true to form by deciding that the political costs of marring the American relationship in this way were too high. Nothing was done. In retrospect, it appears to have been an era of flatulent rhetoric and faceless floundering best exhibited by the two Ministers of External Affairs, Paul Martin and Mitchell Sharp.

While it may appear dubious to root concrete and massive economic and political dilemmas in Canada in the astigmatism of liberal theory, exactly that cast of mind, I believe, is the key to Canada's "silent surrender." Canadian liberalism was all of a piece: a sentimental internationalism, a pussyfooting "quiet diplomacy," and a procrustean view of multinational corporations as ever-friendly "market" phenomena.

As it happened, liberalism proclaimed, and indeed celebrated, the nation's nonexistence. Society was reduced by definition to a collection of self-seeking individuals; the state was merely the instrument of the protection of property and the enforcement of contract. The concept of the nation as such entered obtrusively only in awkward and negative ways: in its economic incarnation it was the progenitor of tariffs and other restrictions on the "natural" free flow of trade and capital. Such a natural flow would make, as everyone from Adam Smith to Milton Friedman knew, for grand global harmony.

The absence of a distinct and traumatic moment of self-creation in Canada gave great power and longevity to an imported British liberalism and its subsequent American version, despite the vital threat it posed to Canada's inner integrity as a nation. Missing as always from such colonial projection was the internally rooted sense of a national self, that is, an independent political culture with its accompanying symbols to evoke and protect Canadian nationhood.

What was thereby so effectively blotted out was the problem of power, particularly the locus of economic power. Thus when power began to shift out of the Canadian economy to Chicago, New York and Washington by virtue of the highly visible and active hand of the multinational corporation, and by virtue of our dependence on Washington's legal and economic policies, we were barely conscious that anything of importance had happened. All we could ask was whether the "market" was functioning properly and whether profits (somewhere, anywhere) were being "maximized."

But the nemesis of the twentieth century must come sooner or later to the adherents of nineteenth-century credoes. So, too, this era moved to its grand moment of culmination when one event lit up the entire Canadian reality. On December 6, 1971, Prime Minister Trudeau visited President Nixon in Washington on a strange quest. He emerged from this meeting elated and euphoric, for the American President had granted Canada something quite "fantastic." Nothing less than a Canadian Declaration of Independence had emerged out of Washington. Presumably that is where it now had to be sought. However demeaning to Canadian sensibilities, a high degree of political realism was involved in this backhanded recognition of how far American control had extended. As Trudeau put the matter the following day to the Canadian Parliament: "He [the President] assured me that it was in the clear interests of the United States to have a Canadian neighbour, not only independent both politically and economically but also one which was confident that the decisions and policies in each of these sectors would be taken by Canadians in their own interests, in defence of their own values, and in pursuit of their own goals." Noblesse oblige. The event was "fantastic" in more ways than one: for Canadian liberalism, the head office is always elsewhere.


But there is a backstage protagonist that has only sporadically appeared on the stage of Canadian-American relations. That protagonist is not, in the first instance, Canadian nationalism, but a more diffuse, unfocused and potentially very powerful force in Canadian politics-grass-roots populism. Its essential cast of mind is the homestead mentality and its articulation is through the politics of space.

In the inner recesses of the Canadian self-image there remains the indelible imprint of the pioneer struggle with the land-the vanquishing of hostile forest, stubborn rock and parched prairie. There is the lasting trauma of outliving bleak winters into a late spring, of existing on the precarious margin of a short Canadian agricultural season. This is the psychic crucible in which Canadian populism was shaped-in latent anxiety, in wariness and reticence and in a sense of ongoing silent siege.

But turning no-man's-land into one's own homestead carries with it ingrained or natural rights that accrue to the survivor. A political sense of earned jurisdiction over a vanquished space that was, at least in principle, inviolable and sacrosanct, became the nuclear element of political identity that arose in the Canadian psyche. Economic and political jurisdiction on the homestead should be untrammeled, and any trespass or political infringement would be resisted.

In the Canadian consciousness, as in Canadian history, the homestead precedes the establishment of the state. This mental landscape that harks back to the primal (even if recent) origins of the country provides the political footing from which the state itself in its various roles may be either substantially endorsed or roundly opposed. The specific political characteristics of the homestead mentality were, often enough, vague; without a strong ideological base and essentially anti-establishment in its orientation, it remained tied by a powerful navel cord to the land either in fact or in persistent imagination. The essential political framework was space rather than class.

Canadian populism is not unique but seems more firmly entrenched than American populism and more readily articulated in a federal system, particularly as the distance from Ottawa increases. Among its distinct features is the very high priority given to preserving social order over established territory. The national symbol in Canada is not the cowboy or the covered wagon-those self-reliant symbols of rough justice individually dispensed-but the opposite, the "Mountie," the lone representative and guarantor of central authority in barely policed areas who "always gets his man." Canadians are prepared to support a virtually unlimited role of the state in the preservation of social order and in the concomitant assertion of sovereignty over the "homestead writ large," the "Dominion from sea to sea." The evidence for such a deep-seated but widely pervasive cast of mind is necessarily impressionistic and scattered, only surfacing occasionally.

The primary concern is with the land. Thus it happened that from the apparently least nationalist part of the country, the Maritime Provinces, there emerged the most stringent legislation barring foreigners from owning land. This has been repeated in Saskatchewan, and has now become an active concern in virtually all provinces, and the federal government is prepared to follow their lead. On September 5, 1975, Prime Minister Trudeau sent a letter to the ten provincial premiers offering to introduce federal legislation granting the provinces the right to restrict foreign ownership of property.

The priority given to land, and the corresponding lethargy regarding industry and technology in the Canadian imagination, were never more dramatically illustrated than in an incident which occurred in 1969. At that time the Humble Oil Company, seeking a Northwest Passage to export Alaskan oil by ship, sent the American vessel Manhattan through the Arctic waters. This raised the specter of whether Canadian sovereignty in Arctic waters was being challenged or jeopardized (the legal issues of which we must bypass here). Recall that this was prior to the oil and gas boom in the Canadian north, so that what was at issue was the fate of the ice floes and glaciers in a virtually uninhabited part of the country. Suddenly, Canadian newspapers from coast to coast, most of which had traditionally welcomed the takeover of Canadian businesses, now wrote as many as two or three editorials a day in great alarm. "Fly the Canadian Flag" read the hysterical headline of the now-defunct Toronto Telegram, a newspaper that had viewed with complacency the passing of 70 percent of southern Ontario's industry to American control.

But this same consciousness underlies (quite apart from the economic issues) Canada's perennial concern with fishing zones, and more recently the 200-mile offshore limit, and its substantial initiative at the Conference on the Law of the Sea. It is also the homestead mentality that may account for the otherwise totally inexplicable Canadian preoccupation with water. Canada possesses something on the order of 20 to 50 percent of the world's supply of fresh water, and an enormous amount runs off annually into the sea, perhaps six percent of the world's runoff. (As usual, we have no exact statistics.) Yet one of the silent but absolute premises that unites Canadians from coast to coast is that not a single drop should be exported, no matter how great the surplus supply may be. As the former premier of British Columbia, W. A. C. Bennett, who had never hesitated to sell anything to the highest bidder, once stated: "Even to talk about selling water is ridiculous. Water is our heritage and you don't sell your heritage." This curious attitude was reflected in the Canadian response to the 1973 Point Roberts affair.2

Without wishing in any way here to advocate the export of water, or to minimize the enormous environmental issues involved, it seems clear from the data we do have that the potential export of a fraction of our surplus water might easily exceed in value any single item of Canadian exports. It is now completely wasted. My purpose, however, is to indicate one of the areas where the deep-seated homestead mentality has surfaced in the political arena and has held fast. The issue of water is as "self-evident" to Canadians at large, as it is puzzling to everyone else.

Land and water are the clues to the underlying attitudes in the new phase of Canadian nationalism which centers on resources, particularly energy resources. The important question in Canada is the extent to which the same cast of mind is now beginning to surface on these closely related issues. As the leading Canadian historian, Donald Creighton, a man of conservative bent, explained in 1970:

Canadians instinctively regard their natural resources in a very special light. . . . These natural resources are not looked upon as ordinary assets-things the Canadians have built or acquired themselves. They are regarded as part of the original endowment of nature, as the birthright of Canada. Many of them are not owned absolutely, as they would be in the United States, by private enterprises. They are properties in which the Crown retains a right, which it has sometimes converted into public ownership, for the beneficial interest of the people of Canada.

It appears that public opinion supports this position. A Gallup Poll of May 16, 1973, asked whether the "Canadian government should nationalize our energy resources, such as oil and gas." Of Canadians across the country 48 percent replied in the affirmative, while 36 percent were opposed. A positive plurality emerged in all three Canadian political parties. A similar Gallup Poll taken in the first week of November 1975 indicated a figure of 51 percent in favor of nationalizing oil and gas and 31 percent opposed.

Thus it would be a mistake to interpret the renewed call for reclaiming our oil and gas, as well as other resources such as potash, as a sudden spread of socialist ideology. The activation of the federal government's corporation, Petro-Canada, as well as similar corporations in provinces such as Alberta, Newfoundland and Saskatchewan reflect an extension of this territorial ethic, not radical in its complexion but essentially conservative. It was a Conservative government that nationalized electricity in Ontario in 1910 and Conservative governments now operate in Alberta and Newfoundland while a social democratic government operates in Saskatchewan.

Thus, populist politics in Canada are indeed the politics of space. Canadian sensitivity to the extraterritorial extension of American law, referred to earlier, has been the chief basis for much unease over American investment. The traditional concern with the integrity of Canadian authority on the "homestead writ large" has far outweighed other considerations such as an unbalanced or truncated economic structure, overdependence on resource development for the U.S. market and a rapidly eroding technological capability.

But the politics of space does not make for a uniform endorsement of state intervention. An indirect legacy of this same cast of mind reinforces the existing struggle of both business and labor against various measures proposed by the federal government. The businessman who struggled to carve out his enterprise "against great odds" will barely tolerate any interference in his prerogative; hence the remarkable campaign mounted by the business community a few years ago against the tax reform proposals of the Carter Commission to fundamentally restructure the business "homestead." Economics was not at issue here (despite much rhetoric about free enterprise) but rather politics, the claim to untrammeled autonomy and jurisdiction of the institutional homestead.

Union leaders who carved out their "homestead," i.e., their union jurisdiction, in the difficult days of the early 1930s, will not tolerate limits on the collective bargaining process-their rightfully earned area of "total authority." In the debate over the government's anti-inflation program of wage and price controls, Canadian labor unions were militantly opposed as were unions in other countries. But a hidden dimension added a particular acrimony to this debate in Canada. Canadian unions were prepared to sink the whole anti-inflation program because it was an intrusion into their political space.

These are not primary but background features of the domestic political scene, and by no means unique to Canada. But in a federal state such as Canada, populism has held on longer and more forcefully, sheltered by the significant provincial enclaves of power. The implicit political game in Canada is somehow to tap this very powerful and widespread populist undercurrent. If successfully achieved on rare occasions, the political payoff can be enormous. This largely accounts, in my view, for the landslide Conservative victories by John Diefenbaker in 1958-59. Diefenbaker appeared as the living image of old-fashioned prairie populism. It also accounts, for quite different reasons-largely because of an image of popular irreverence and iconoclasm-for the substantial Liberal victory of Pierre Trudeau in 1968: the upper-class man in populist clothing.

Populists feel safest when they can have it both ways. While they retain a healthy skepticism of the liberal establishment-the moneyed, the educated and the bureaucracy-they are not prepared to trust their own leaders to govern except on rare occasions. (This syndrome is not unlike that of the British Labour Party's tendency to select its leaders from the graduates of the public school and from Oxbridge.) Populism is more often successful on the provincial rather than the federal scene where the risks of bungling by those without "class" or "experience" are less. In day-to-day politics, populism stands aside as a suspicious but vigilant monitor of potential state intrusions into the equivalent of the homestead, and as a militant guardian of social order and national sovereignty.

Thus at the time of the OPEC oil embargo, when Americans heard the crisp statements of Canadian intentions not to pool energy shortages with the United States, but instead to cut back on energy exports, they might have discerned several different notes in the chord. First, there was the reaction to the fiasco around the nonexistent reserves centered on the oil companies' misleading figures. Second, the underlying populist sentiment in Canada had now begun to come forward as an ongoing and overt political factor around the resources question. Third, the nationalist message itself had begun to penetrate the political process.

The linking of these latter two elements may be decisive and may become the dominant factor in future Canadian-American relations.


I have overdrawn somewhat the characteristics of the two major casts of mind in Canada. Their elements are often to be found in some combination within the same individual and within all three major political parties. How do they each relate to the new nationalism?

Modern Canadian nationalism is a relative latecomer to the political scene, barely two decades old. It cannot be understood as a movement, but as a countermovement to the astigmatism of the liberal position. Its aim is to protect the fabric of Canadian society against the autonomous and relentless forces running "free" in the North American market economy.

In their public image in Canada, nationalists stand in some awkward middle position between liberals and populists, somewhat suspect to both sides. Populists tend to regard nationalism as an elite heresy, the inverse image of the liberal ethic in which they have no direct stake, and have therefore largely stood aloof from a full nationalist program. Liberals, in turn, have tended to regard the nationalist position as a retrogressive, inward-looking throwback, vaguely populist, for which there is no clear place in the modern world.

Nevertheless, despite these suspicions, and because of the palpable force of circumstances, a limited form of nationalism has quietly spread to a wide segment of the population and has in its own way outrun the actual membership of nationalist organizations such as the Committee for an Independent Canada.

But there are no optimistic forecasts to be made any more for the recapturing by Canadians of their own economic and cultural autonomy-even though in the modern world, the issue can at best be only a matter of degree. Sometimes it seems to Canadian nationalists, from past experience, that if things can possibly go wrong, they will. Nevertheless, there are solid indications that the major battle in Canada has now begun over the question of resources. Here the populist consciousness may well become fully engaged in the reclaiming of the "homestead" along with nationalists whose concern has traditionally been the wider link between resources and industry. Liberals, in turn, now have cause to see all about them, late in the day as it is, the consequences of their beneficent sleepwalking and defer in a limited way to moderate nationalist arguments.

But none of this in itself necessarily makes for substantial policy changes in Canada. Change, rather, is being galvanized by economic factors: increases in heating and gasoline bills, the vast capital sums that will be needed for pipelines from the north and their attendant inflationary effects, and the major balance-of-payments problems that Canada may anticipate from mounting oil imports.

The nationalist program on energy exports now begins to make sense to many Canadians for it calls for a substantial further reduction in energy exports to the United States. While there is no unanimity on how much or how quickly, a further cut from the 1976 level of 460,000 barrels of oil a day would seem to be warranted, i.e., a more rapid implementation of existing policy.

In regard to natural gas, the Canadian government is following a standpat position, hoping to fulfill existing contracts with the United States-however fraudulent the information on which the 1970 export decision was based-and to meet the domestic shortage with a vastly expensive pipeline from the far north. Since Canadian discoveries of gas in the north are still inadequate to finance a pipeline (3.5 to 5 trillion cubic feet), the intention is to have the pipeline carry jointly Canadian and Alaskan gas, the latter destined for the United States. Total long-term contracts call for the export of 14 trillion cubic feet of Canadian gas to the United States between 1974 and 1995. It is the commitment to these export contracts and the uncertainty about the rate of new discoveries in Alberta and their deliverability that prompts this pipeline policy. Meanwhile, the most easily accessible, high-pressure gas fields (Waterton B.H.K. and Kaybob South) are now under contract to California by the American-owned Alberta and Southern Gas Co. Approximately one trillion cubic feet of gas is exported annually from western Canada, equal to two-thirds of domestic Canadian consumption.

Most nationalists in Canada would argue for a drastic change in government policy. The Mackenzie Valley pipeline would cost some $10 billion to build. It would have substantial disruptive effects on northern ecology and on the native peoples, and would produce a serious inflationary impact on the Canadian economy. This could all be averted by a moratorium on the project contingent on a drastic reduction of gas exports to the United States.

Under sections 17(2) and 85 of the National Energy Board Act such reduction or elimination of licensed exports is legally possible if domestic supply conditions warrant it. The diversion of, say, 10 trillion cubic feet of gas, earmarked for export, to domestic use would add seven years to Canada's gas supply at 1975 consumption rates and would postpone the need for this expensive pipeline. While new discoveries were being sought in Alberta, American buyers might be given three year's notice of the rescinding of our export agreements and might then contract for whatever surplus gas they could discover that would begin to fulfill their overly sanguine 1970 reserve estimates.

Not to be neglected are the long-term political problems associated with moving Alaskan gas through a Canadian pipeline to the United States. The claims of native groups and environmentalists have hardly begun to be met and we can anticipate that political opposition in this whole area may be very great. Given the potential strategic importance of such a pipeline to the United States, the interests of the American military and intelligence establishments in the security of such a pipeline may tighten the American embrace on Canada even further, particularly since American financing and American gas would be centrally involved in the project. Canadians are not unmindful of the dangers of creating a land-based "Panama Canal"-type situation in their country. The contemplated pipeline treaty between the two countries may be reassuring, but cannot dissolve the political and strategic issues. Thus the pipeline carries with it substantial economic, ecological and political risks for Canada, risks that are too great, in my view, to warrant fulfillment of our American contracts. It is a precise case in point where Canada must, in its own interest, take action that is retroactive and discriminatory.

The populist response to such a program and to the larger question of a new resource policy is not easily predictable. Populism is more at home as the unofficial opposition in day-to-day politics, and is more of an impulse than a movement. Much will depend on the political image the immediate issue assumes. If it comes up as an issue of social order cum sovereignty, one may expect widespread public support for greater Canadian control of our natural resources and great pressures on whatever government is in power. For example, a popular move would be for the government, through Petro-Canada, to buy out one of the major oil companies such as Imperial Oil.

The attempt to deal more forcefully with the high percentages of American control of the manufacturing industry is not on the immediate political agenda. This will have to await a further development of public consciousness around the issue of a national industrial strategy designed to integrate more directly our resource production and manufacturing activity. All that Canadian nationalists can hope for now is that the few cultural initiatives will be sustained, that the screening and review process on foreign companies will be expanded and that resource nationalism will become the political base for expanded initiatives by Canadians to become masters in their own house.


Such is the direction of the Canadian political endowment at the moment when the country is gathering its second wind. Hence the new American Ambassador to Canada, Thomas O. Enders, may have been somewhat premature in his maiden speech to the Canadian Club of Ottawa last March when he stated: "We are both conscious that the end of the 'special relationship' frees us both from historical hang-ups in pursuing our interests." In the traditional terms in which the Canadian-American relationship has been conducted, he was perfectly correct.

But a realignment of the old liberal credo, wearing its complementary faces in both countries, may not be the best preparation for what is to come. In Canada, an old set of "historical hang-ups" may just be coming into place. For example, Saskatchewan's intention to acquire half the province's potash capacity (largely American-owned) may be better understood in the light of what we have been discussing. This prospect poses the dilemma that the province would then have control of one-third of the U.S. potash supply. "Although welcome," the Ambassador added, "statements that this power would be used benignly are not adequate reassurance."

The power question in all its new and interlocking dimensions goes to the heart of the matter in Canadian-American relations. The Ambassador did sympathize in his speech with "the assertion of Canadian national purpose" and did not contest the right of Canadians to expropriate "provided it is paid for fully, promptly, and effectively." But this expanded liberalism does not settle the question of power, and such an underlying and often hidden issue as potash may be the forerunner of similar problems yet to arise.

The power question-and there is none more important-is now on the agenda, and it is clear that the fundamental and long-standing lopsidedness of the distribution of power as it affects Canadian interests needs major correction. Canadians may be forgiven for a sense of déjà vu. Statements that American power in Canada, at so many different levels, "would be used benignly" have a remarkably familiar ring and are not, as the Ambassador states, "adequate reassurance."

It is on the resolution of this central item on our joint agenda that everything now turns.


1 The full titles of these government reports are respectively: The Royal Commission on Canada's Economic Prospects; Report of the Task Force on the Structure of Canadian Industry; Report (11th) of the Committee Respecting Canada-U.S. Relations; and Foreign Direct Investment in Canada.

2 In the relatively minor Point Roberts affair in 1973, the issue was the export of a miniscule amount of water from the lower British Columbia mainland to an adjacent five-square-mile resort area which was American territory. The Canadian verdict was a unanimous No. The sophisticated, and certainly non-nationalist Toronto Globe and Mail, "Canada's national newspaper," commented editorially that "To supply water to Point Roberts would set a most dangerous precedent" since "we do not have any accurate idea of what our future needs will be. We have many, many questions about water that are yet to be answered, and may have to wait for future generations to answer." And what was the Globe's own answer to the affair? Nothing less than "to make Point Roberts Canadian territory" (August 16, 1973, my italics).

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  • Abraham Rotstein teaches in the Department of Political Economy at the University of Toronto and is one of the editors of Getting It Back, A Program for Canadian Independence, sponsored by the Committee for an Independent Canada.
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